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Rick Perry Toasts Arthur Laffer, Roasts California

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Arthur Laffer (left) and Gov. Rick Perry
Arthur Laffer (left) and Gov. Rick Perry

If you listen to Texas conservatives, California is a dilapidated hellscape that’s rapidly plunged into Third World status, like Bangladesh with more plastic surgeons.

At a get-together convened by the Texas Public Policy Foundation today, Gov. Rick Perry joined legendary conservative economics guru Arthur Laffer in yet another in a long list of bids to wrest control of the national consciousness from that great nemesis of our greater state — California.

Chuck DeVore, a six-year member of the California State Assembly who moved to Texas and joined TPPF in 2012, introduced Laffer, the supply-side sensei who gave to the conservative movement in the 1970s the gift of the Laffer Curve, reportedly drawn-up on a napkin.

Laffer imprinted on the Reagan revolution the argument that economic vitality and tax revenues could be grown by cutting tax rates. Laffer’s theory and its implications are hotly contested, and  many mainstream economists don’t subscribe to his interpretation of the curve.

DeVore was effusive in his praise for Laffer — he credited the economist with helping to wreck the Soviet Union. But he wasn’t the only one. Laffer related that he’d had breakfast with gubernatorial candidate Greg Abbott, and that the two were in perfect sync. Rick Perry, too. “I cannot say that there’s anyone I respect any more than Arthur Laffer,” Perry said in his opening remarks.

Last time Laffer made waves in the state, it was for less auspicious reasons. Since the end of the Reagan years, Laffer’s been getting paid for lending his name to some highly dubious business propositions. In 1990, Laffer received a fee for touting a “multi-level marketing scheme” called FundAmerica — the founder of which was charged in Florida for running a pyramid scheme. Laffer was one of several involved who were hit with a $150 million class-action lawsuit. In 2002, Forbes criticized Laffer for lending his name to Casmyn Corp, which mined gold in Zambia and Zimbabwe before imploding in catastrophic and outlandish fashion.

In 2004, he was sued for his endorsement of Qualmag, a San Diego company attempting to develop a “batteryless power supply capable of operating on static energy.” Investors said the firm was predestined to be a flop — and Laffer settled. Then, last year, 52 Texas investors sued an investment fund associated with Laffer, the Laffer Frishberg Wallace Economic Opportunity Fund, for allegedly funneling money into Biz Radio, a company also tied to Laffer, “with no hope of reasonable return.” Investors claim the company was a Ponzi scheme.

At the event today, Laffer spent much of his time comparing the economic vibrancy of California to Texas, noting that one alternate method of calculating poverty rates puts California at the top of the list. That, combined with the Golden State’s high cost of living and highly-paid public employees, proved the efficacy of the ‘Texas Model.’

California has been a mess, for a whole host of reasons, many of them relating to the awkward and convoluted way the state is governed — a bastardized kind of direct democracy — a subject that received much attention from The Economist in 2011. Many of the obstacles California homeowners and businesses face seem unreasonable — but Laffer also touted several metrics that seemed to muddle his case.

California, Laffer bemoaned, “pays educators 20 percent more than Texas.” Social workers, he said, “make over $56,000 a year. In Texas it’s $37,000 — a 53 percent difference.” It’s certainly Laffer’s right to argue that it’s better for teachers to be paid less, but it might not be the winning argument he thinks.

Perry preferred to paint with a broad brush, pointing to recent high-profile features of Texas’ rapid economic expansion.

“How many people, just a short 10 years ago, would have said, the United States Grand Prix would be in Texas?” he asked the crowd enthusiastically, referring to the Formula 1 race in Austin this weekend.

That wasn’t all Perry was taking credit for.

“There’s a reason they’re building a new performing arts facility in San Antonio, Texas, right now. There’s a reason that in Fort Worth, they built a new museum of modern art,” he said. “That Dallas has build two new performing arts facilities in the last 10 years. The American Film Institute’s headquarters is in Dallas now.

“It didn’t happen by accident. It’s because of policies we’ve put in place in the state.

“I think the debate’s over,” Perry said. “The proof is in the pudding. Texas wins.”

California wasn’t the only blue state to garner the speakers’ derision, though. Laffer slammed the administration of former New Jersey Gov. Jon Corzine, who he said he had once taught.

“Full disclosure: He was a C student,” he said. “And he may not have earned the C.”

To which Perry replied: “What’s wrong with being a C student?”

In closing, TPPF President Brooke Rollins offered the consolation of the free market to Californians. As if she was talking about a relapsed drug addict to unsympathetic friends, she intoned to the crowd: “We want California to do well.” If all those Angelenos just decide they want to get clean, “prosperity is around the corner.”

It’s worth getting the Californian perspective in this. Governor Jerry Brown famously called Perry’s efforts to woo companies to Texas “barely a fart.” Brown, who’s been increasingly praised for able leadership and California’s own changing fortunes, recently passed a budget that restored cuts to education — and even began paying down the state’s debt. The economy is coming back, and the Golden State even has its own version of Texas’ Rainy Day Fund.

But other Californians don’t take too kindly to naked derision, either. Subjecting Texas to other metrics, the editorial board of the Sacramento Bee responded to Perry’s consistent criticism this February by bemoaning Texas’ “high dropout rate, lack of health insurance coverage and economic disparities,” its status as “a state that is last in mental health expenditures and workers’ compensation coverage, first in the number of executions, first in the number of uninsured, first in the amount of carbon dioxide emitted and first in the amount of toxic chemicals released into water.”

“Texas can be better and wants to be better,” the editorial concluded. “Californians should help it out.”

Christopher Hooks joined the Observer in 2014. Previously, he was a freelance journalist in Austin, where he grew up. His work has appeared in Politico Magazine, Slate, and Texas Monthly, among others. He graduated from The New School in 2012 with a bachelor's degree in history.

  • channelclemente

    Perry and Laffer. This is just too easy.

  • unclejeems

    A quack and a dope. A real strong one-two punch you’ve got there, Texas.

    • DavidD

      Hey we are proud of our assholes and criminals.
      Small town Texas takes our resident yahoos and yum yums and put them out there for the world to appreciate.
      Austin is just the same policy on a larger scale.
      Most of us have given up on electoral democracy and just watch the show and shake our heads.
      Eventually we will get tired of it and a populist wave will drive the thieves from the Temple and we are about due one.

  • http://www.ChuckDeVore.com/ Chuck DeVore

    Interesting that the piece ended with the Sacramento Bee’s off key criticisms of Texas. Regarding the high school graduation rate, they’re just flat wrong. The latest data from the U.S. Department of Education (http://eddataexpress.ed.gov/) shows Texas near the top of the pack among states with an 86% graduation rate (in the top quintile) compared to California’s rate of 76% (in the 2nd from the bottom quintile). Rather than bemoaning CO2 emissions let’s look at air pollution that actually harms people and plants. According to the U.S. EPA, out of the 25 worst metro areas for particulate pollution and the top 25 for ozone pollution, California boasted 19 and Texas 3 for 2012. I mentioned both to the Sacramento Bee — they’re didn’t run a correction.

  • veronica smith

    I live in Texas. I am a California native. I can tell you from experiencing life in two completely different places… Texas is not much different from what it was before the American Civil War… and the “leaders” of this state would gladly and quickly turn back to the way things were run before. No joke. Unless you’ve lived in both places and experienced life in both places, do not think you can comment back to this because you lack the experience. Thanks.
    P.S. In case you think this has to do with my race, and that this is the reason why I don’t like Texas, think again. I am white.

    • DavidD

      Move back then,
      Our pillows will not be wet with tears at you leaving us.
      I grew up here and had to memorize the Gettysburg Address and sang the Battle Hymn of the Republic in my schools choral groupThat was in the early sixties.
      We are not a union of states but of people and if you want to be backward then we don’t need you..
      An urban dweller in Houston has a lot in common with an Angeleno.People are moving here from all over the world and it is an exciting time to live in Texas.
      Join with me with Battlegroundtexas and change the political leadership and quit sniveling that a place won’t jump through hoops to suit you.

  • https://www.youtube.com/watch?v=94rcOVJBMYQ Winston Blake

    The difference between a Texas and a California cowboy…

    When they both see a cow with its head stuck in the fence, the Texas cowboy fúcks the cow and asks the California cowboy if he wants some…

    …the California cowboy sticks his head in the fence, drops his drawers, and says “o.k.”

  • Travelsteve

    I’m a native Texan that escaped the place just after high school in the late 1970’s and moved to California. I bought into the hype as a kid but when I traveled to California at the age of 20 I was amazed. Never could I move back to the state of Texas. It’s beyond being backwards and many of its people seem to celebrate it. The racism, homophobia and attitudes toward women seem to be stuck in the 1950’s.
    For a state that loves to toot is horn about freedom and liberty I find the place to be suffocating. You couldn’t pay me enough to go back, and I cringe just going back to visit family. The love of guns is astounding to me. We in California celebrate our true freedom in a state that might have its problems but we’re moving forward at a break-neck speed with solid growth, not Walmart jobs. Secede already and be done with it. Texas will never be able to compare itself to the California that I know and in any shape or form, ever.

    • DavidD

      Disassociation is treason just like secession.Houston is the only major city to have an openly gay mayor.not San Francisco,not Los Angeles.
      You poor sensitive soul.Having to generalize about a place to tear it down so you can pretend to be superior.
      I lived out in California for awhile and it had a lot of great places and wonderful people.We are your countrymen and women and it sounds like you just have a personal problem with diversity.